General Instructions :

Read the following instructions carefully and follow them :

(i) This question paper contains 34 questions. All questions are
compulsory.
(ii) This question paper contains two sections, section-A and B.
Section -A: Macro Economics
Section -B: Indian Economic Development
(iii) This paper contains 20 Multiple Choice Questions type questions of
Imark each.
(iv) This paper contains 4 Short Answer Questions type-I questions of
3 marks each to be answered in 60 to 80 words.
(v) This paper contains 6 Short Answer Questions type-II questions of
4 marks each to be answered in 80 to 100 words.
(vi) This paper contains 4 Long Answer type Questions of 6 marks each to
be answered in 100 to 150 words.
(vi) Attempt all parts of a question together.

Section-A
(Macro Economics)
1 "In the Annual Budget 2022-23, the Government of India set up
disinvestment targets of ? 65,000 crore".
Such proceeds from disinvestment can be classified as receipts in the
Government Budget as it leads to of the Governmnent.
(Choose the correct alternative) 1
(a) capital, decrease in assets (b) revenue, increase in assets
(c) capital, increase in liabilities (d) revenue, decrease in liabilities

2 Read the following statements Assertion (A) and Reason (R). Choose one
of the correct alternatives given below:
Assertion (A):The Balance of Payments is in surplus, if autonomous
receipts are greater than autonomous payments.
Reason (R) : Autonomous transactions are determined by the difference
in the Balance of Payments.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A).
(b Both Assertion (A) and Reason (R) are true and Reason (R) is not the
correct explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.

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3 Read the following statements carefully : 1

Statement 1 : The induced consumption shows, the direct relation

between consumption and income.
Statement 2 : With a certain increase in income, induced consumption
also increases.
In the light of the given statements, choose the correct alternative from
the following :
(a) Statement 1 is true and Statement 2 is false.
(b) Statement l is false and Statement 2 is true.
(c) Both Statements land 2 are true. 5/48
(d) Both Statements 1 and 2 are false.

4 Ms. Iqra Ansari, a teacher, was explaining in her class about various
types of deposits with the commercial banks. She quoted that -
"These deposits form a part of M1 measure of money supply and are
payable on demand by the commercial banks."
Identify the type of deposits she was explaining about and choose the
correct alternative : 1

(i) Demand Deposits

(ii) Time Deposits
(iii) Post Office Deposits
Alternatives :
(a) Only (i) (b) Only (i)
(c) (i) and (ii) (d) (i), (ii) and (iüi)

5 As per the Reserve Bank of India (RBI) press report, dated 22 nd June,
2022 : 1
"Net Foreign Portfolio Investment (FPI) recorded an outflow of US$15.2
billion mainly from the equity market."
The above transaction will be recorded in the account on side
of Balance of payments account of India. (Choose the correct alternmative)
(a) current, credit (b) current, debit
(c) capital, credit (d) capital, debit

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6 (A) Read the following statements carefully :
Statemnent 1 : Gross Domestic Product (GDP) is the sum total of the
gross market value of all the final goods and services added by
all the sectors in the economy during a fiscal year.
Statement 2 : Gross Value Added at Market Price (GVAMp) is equal
to the excess of value of output over intermediate consumption.
In the light of the given statements, choose the correct alternative
from the following:
(a) Statement 1 is true and Statement 2 is false.
(b) Statementl is false and Statement 2 is true.
(c) Both Statements l and 2 are true.
(d) Both Statements 1 and 2 are false.
OR
(B) On the basis of the figure given below, identify the type of flow
indicated by B and D :
(Choose the correct alternative) 1

Spending
Goods and Services B

Pirms Ilouseholds
Factor Payments
Factor Services D
Alternatives :
(a) Real flow (b) Money flow
(c) Nominal flow (d) National flow

7 Assuming that, the following data is given for an imaginary economy : 1

Year 2020 ( in Cr.) 2021 ( in Cr.)
Items
Exports of visbles 1,000 1,100
Imports of visibles 800 850

The balance of Trade from 2020 to 2021 by ? crore.

(Choose the correct alternative)

(a) increased, 200 (b) decreased, 200
(c) increased, 50 (d) decreased, 50

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 In order to tackle the problem of rising general price level in an economy,
government may come up with a surplus budget to achieve the budget
objective of 1

(i) reallocation of resources

(ii) price stability
(iüi) redistribution of income
Alternatives :
(a) (i) only (b) (ii) only
(C (ii) only (d) i) and (ii)

9. (A) Read the following statements Assertion (A) and Reason (R).
Choose one of the correct alternatives given below: 1

Assertion (A) : At the break-even level of income, the value of

Average Propensity to Consume (APC) is zero.
Reason (R) : Sum of Average Propensity to Consume (APC) and
Average Propensity to Save (APS) is always equal to one.
Alternatives :
(a) Both Assertion (A)and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is
not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.
OR
(B) refers to that level of Aggregate Demand, which can be met by
the corresponding supply in the economy.
(Fill up the blank with correct alternative) 1

(a) Autonomous Consumption (b) Effective Demand

(c) Excess Demand (d) Deficient Demand

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10. (A) In the Indian economy, are issued by the Reserve Bank of
India and acts as legal tender money. 1

(1) Coins of all denomination

(ii) Currency notes of various denominations, except one rupee note
(ii) Demand deposits
Alternatives :
(a) Only (i) (b) Only (i)
(c) Only (i) (d) (i) and (iü)
OR

(B) formulates the Monetary Policy in the economy.

(Fill up the blank with correct alternative) 1

(a) Commercial Banks (b) International Monetary Fund

(C) Central Bank (d) Central Government

On the basis of the data given below for an imaginary economy, estimate
11.
the value of Net Domestic Product at factor cost (NDP ro):
Amount
S. No. Items
(R in crore)

Household Consumption Expenditure 2,000

(i)

(iü) Government Final Consumption Expenditure 1,500

Gross Domestic Fixed Capital Formation 1,000

(iii)
Net additions to stock 300
(iv)
700
(v) Exports
350
(vi) Net Indirect Taxes
200
(vii) Imports
250
(vii) Consumption of Fixed Capital

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12. (a) "Under the flexible exchange rate system, the Central Bank does not
intervene in the foreign exchange market."
Justify the statement, giving valid arguments.
OR
(b) Explain the impact of home currency depreciation on the exports of a
nation. 3

13. "The process of credit creation by commercial banks comes to an end when
the total of required reserves become equal to the initial deposits."
With the help of a numerical example, prove that the given statement is
true. 4

14. (a) "In an economy er-ante Aggregate Demand is more than er-ante
Aggregate Supply."
Explain its impact on the level of output, income and employment. 4
OR
(b) For a hypothetical economy, assuming there is an increase in the
Marginal Propensity to Consume (MPC) from 75% to 90% and
change in investment to be 1,000 crore. 4

Using the concept of investment multiplier, calculate the increase in

income due to change in Marginal Propensity to Consume (MPC).

15. With suitable examples, distinguish between Direct taxes and Indirect
taxes. 4

16. (a) i) "Many goods and services which may contribute to welfare, but
are not included in estimating Gross Domestic Product (GDP)."
Do you agree with the given statement ? Give valid reason in
support of your answer.
(ii) With suitable examples, distinguish between final goods and
intermediate goods. 3
OR
(b) (i) Using a suitable numerical example, distinguish between Real
Gross Domestic Product (GDP) and Nominal Gross Domestic
Product (GDP). 4
(ii) State the meaning of 'normal resident' of a country. 2

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D
 17. Read the following text carefully. Answer the given questions on the basis
of the same and common understanding :

On 30th September 2022, the Reserve Bank of India (RB) raised

Repo Rate for the fourth time in a row. The Monetary Policy Committee
(MPC) decided to raise the policy rate by 50 basis points

1basis point = 100 of a percent . After this announcement, the new

repo rate stands at 5.9%, while the reverse repo rate continues to stand at
3.35%.

Commercial banks borrow money from the Central Bank, when there
a shortage of funds. With the surge in the repo rate, borrowings by
general public will become costlier. This is because, as RBI hikes its repo
rate, it becomes costly for the banks to borrow short term funds from the
Central Bank.
As a result, the banks hike the rates at which customers borrow
money from them to compensate for the hike in the repo rate. This
happens because banks offer loans to retail consumers at an interest rate
which is generally, directly proportional to the repo rate.
The increase of 0.50 percent in repo rate will lead to a higher interest
rates on loans for borrowers, implying that the Equated Monthly
Instalments (EMIs) for repaying the existing loans will also increase.
Source :
https:/ www.businessstandard.com/articleleconomicpolicy/rbi-monet
policy-repo-rate-up-by-50bps-here-s-how-it-will-impact-you-122093000267 (Edited)ary
(a) Define 'Repo Rate'. 1
(b) Outline the recent change made by the Monetary Policy Committee
of Reserve Bank of India in the repo
rate. 1
(c) "Increase in repo rate is an important tool used by Monetary Policy
Committee to combat the situation of inflation in the Economy."
Justify the given statement. 4

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 Section - B

(Indian Economic Development)

18 Which of the following is NOT true about foreign trade during the colonial
rule ? (Choose the correct alternative) 1
(a) India suffered from large trade deficit.
(b) Restrictive policies of commodity production, were followed.
(c) Britain maintained a monopoly control over India's exports and
imports.
(d) India became an exporter of primary products and an importer of
finished consumer goods.

19. (A) a process, which includes all the activities from sowing till
sale of the final produce in the market.
(Fill up the blank with correct alternative) 1
(a) Rural Development (b) Agricultural Diversification
(c) Organic Farming (d) Agricultural Marketing
OR
(B) have emerged as an important micro finance system and led
to women empowerment. (Fill up the blank with correct alternative) 1
(a NABARD (b) Self-Help Groups
(C) Commercial Banks (d) Land Development Banks

20. (A) Read the following statements - Assertion(A) and Reason (R).
Choose one of the correct alternatives given below : 1
Assertion (A) : Human capital is not traded in the market; however
its services are traded.
Reason (R) : Human capital is intangible in nature.
Alternatives :
(a) Bot.h Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is
not the correct explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.
OR

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 (B) Benefits of physical capital accrue only to private entities, whereas
human capital provides private as well as benefits.

(Fill up the blank with correct alternative) 1

(a) profitable (b) social

(c) fiscal monetary

21. Read the following statements carefully : 1

Statement 1:China introduced structural economic reforms on its own,

without any pressure.

Statemnent 2 : Scholars argue that in India, the economic reforms process

led to the worsening of all the economic indicators.
In the light of the given statements, choose the correct alternatives from
the following :

(a) Statement 1 is true and Statement 2 is false.

(b) Statement 1 is false and Statement 2 is true.

(C) Both Statements 1 and 2 are true.

(d) Both Statements 1 and 2 are false.

22. Which of the following was NOT the benefit accruing from Golden
Revolution' ? (Choose the correct alternative) 1

(a) Increase in the income of the farmers.

(b) Increase in production of milk and related products.
(c) Increase in production and exports of fruits and vegetables.

(d) Employment for women in rural areas.

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23. From the set of the events given in Column I and the corresponding year
in Column II, choose the incorrect pair 1

Column -I Column -II

A Introduction of railways in India i) 1850
B. Incorporation of TISCO (iü) 1807
C. First Official Census of India (iii) 1881
|D. Opening of Suez Canal (iv) 1869
Alternatives :
(a) A- (i) (b) B- (ii)
(c) C- (iii) (d) D- (iv)

24. (A) China initiated in 1958, that aimed at industrializing the

country on a massive scale. (Fill up the blank with correct alternative)
(a) The Great Proletarian Cultural Revolution
(b) Setting up of Special Economic Zones
(c) Introduction of Economic Reforms

(d) The Great Leap Forward Campaign

OR
(B) acts as a measure of 'the extent of democratic participation in
social and political decision-making.'
(Fill up the blank with correct alternative) 1

(a) Human Development Index (b) Liberty Indicator

(C) Economic Growth (d) Poverty Index

25. In an economy, when the rate of resource extraction is lower than the rate
of regeneration of the resource, the environment may operate 1

(Fill up the blank with correct alternative)

(a) within its carrying capacity. (b) beyond its absorptive capacity.
(c) beyond its carrying capacity. (d) beyond its aesthetic capacity.

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 1
statements carefully :
26. Read the following the largest
Amongst India, China and Pakistan, China is
Statemnent 1:
density.
nation and has the highest population led
2 : One-child policy introduced in the late 1970s in China
Statement
population growth rate.
to a considerable decline in the
alternative from
statemnents, choose the correct
In the light of the given
the following :
false.
(a) Statement 1 is true and Statement 2 is
true.
(b) Statemnent 1 is false and Statement 2 is

(c) Both Statements 1 and 2 are true.

(d) Both Statements 1 and 2 are false.

incorrect statement in
27. On the basis of the data given below, identify the
terms of annual growth of GDP (%) : (Choose the correct alternative) 1

Annual Growth of Gross Domestic Product (%). 1980 - 2017

1980 90 2015 - 2017
Country
India 5.7 7.3

China 10.3 6.8

Pakistan 6.3 5.3

Source : Key Indicators for Asia and Pacific 2016. Asian Development Bank.
Philippines : World Development Indicators 2018.
Alternatives :

(a) China was able to maintain near double-digit growth during the
1980s.

(b) Pakistan was ahead of India during 1980 - 2017.

(c) India experienced a rapid rise in Gross Domestic Product during
2015-17.

() Both China and Pakistan experienced a decline in growth rate

during 2015-17.

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28. "Serious concerns over the climate change is taking over the attention of
the world." 3

In the light of the above statement and image, discuss any two strategies
to tackle this global concern of Environmental degradation.

29. (a) "Recently the Government of India has taken numerous steps

towards increasing the farmer's income through agricultural

diversification."

In light of the above statement, explain any two advantages of

diversification in agriculture.
OR

(b) "Active Government intervention is essential in education and health

sectors in India."

Do you agree with the given statement ? Give reasons in support of

your answer.

30. Discuss any two merits and demerits of the Green Revolution in the
agricultural sector in the Indian economy. 4

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 31. On the basis of the given data
Some Selected Indicators of Human Development, 2017-2019
Item India Chna Pakistan
Human Development Index (Value) 0.645 0.761 0.557
Rank (based on IIDI) 130 87 154
Life Expectancy at Birth (years) 69.7 76.9 67.3
Mean years of Schooling (% aged 15 and above) 6.5 8.1 5.2
Gruss Nalunal Incorne per capila (PPP US$) 6,681 16,057 5.005
Percentage of People ltving Below Poverty Line (National) 21.9* 1.7** 24.3
Infant Mortaltty Rate (per 1000 ltve births) 29.9 7.4 57.2
Maternal Mortality Rate (per 1 lakh births) 133 29 140
Population using at least basic Sanitation (6) 60 75 60
Population usingat lcast basic drinking 93 96 91
Water Source (6)
Percentage of Undermourished Children 37.9 8.1 37.6
Note: for the ycar 2011: for the years 2015.
Sources: Human Development Report 2019 and 2020.
(i) Identify one income indicator and one health indicator, each. 2
(ii) Compare India and China on the basis of any one of the
indicator
identified above in part (i). 2
32. (a) "Expenditure on On-the-job training is an important
means of
human capital formation in an economy."
Give valid reasons to justify the given statement. 4
OR
(b) "Organic Farming is the need of the hour to promote
development but, has its own limitations."
sustainable
Elaborate any two advantages and limitations each of organic
farming in the light of the above statement.
33. (a) (i) Define Worker Population Ratio. Discuss its usefulness. 3
(ii) Mr. Rishi, after completing his education, has joined his family
business but his marginal productivity zero."
Comment upon the employment status of Mr. Rishi. Give valid
reasons in support of your answer. 3
OR
(b) (i) Kavya works on her family farm and is neither paid in cash nor
in the form of grains.
Can she be categorized as a worker ? Give valid reasons in
support of your answer.
(ii) "In the late 1990's India experienced a 3
widening gap between
the growth of GDP and employment generation". Discuss. 3

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34. Read the following text carefully and answer the given questions on the
basis of the same and common understanding.
The stabilisation and structural adjustment measures, initiated under the
1991 "Economic Reforms" mark a watershed moment in India's economic
policies. For almost three decades since independence, India's development
strategy and economic policies were guided by the objectives of accelerating
the growth of output and employment with social justice and equity.
Ever since the 1970's, it was realised that many of the regulations on
economic activities have outlived their usefulness and were in fact
hampering economic growth and development. In response to this, the
government initiated some milder liberalisation reforms for almost a
decade since the early 1980's.
However, the Indian economy soon had to face the Gulf crisis and
consequently:
(i) The uncertainties about the oil prices;
(ii) The external payment problems;
(iii) The serious inflationary pressures;
(iv) The scarcities of essential commodities;
(v) The deterioration of fiscal discipline, etc.
These led to the Indian economy on the verge of Economic crisis.
In response to this emerging crisis, the Government initiated a set of
stabilisation and structural reforms like:

(1) Reduction in fiscal deficit:

(ii) Containment of growth in money supply;

(iii) An exchange rate adjustment system etc.
The key objective of stabilisation policy was to bring the growth of
aggregate demand in line with long term growth path of the economy.
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 In conjunction, the structural adjustment measures like;
industrial delicensing
(ii) liberalisation of policy regime governing international trade
(iii) deregulation of financial sector
Were taken to improve the supply side of the economy This shifted
the long-term growth path of the economy itself completely.
(Adapted and modified)
Source:
https:/niti.gov.inplanningcommission.gov.inldocs/reports/genreplarep9099/at94
95.htm
(a) Briefly outline any two reasons for the initiation of Economic
Reforms in 1991. 2
(b) Government introduced a set of stablisation and structural reforms
to solve the economic crisis. State the key initiatives and objectives of
these policies adopted by the Government of India.

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